The Government is to look at setting up a 'warrant of fitness' for rental houses and reduce reliance on loan sharks by piloting a scheme to provide low- or no-interest loans for people on low incomes.

The two measures are part of a raft of Budget initiatives aimed at helping those in poverty.

The micro-financing scheme was recommended by an Advisory Panel on Child Poverty which said that in homes where debt was a problem there was less money for basic needs of children such as food, clothing, heating, transport and schooling.

Social Development Minister Paula Bennett said debt could create hardship for people, and the Government was investigating partnering up with community groups and financial organisations such as banks to get access to affordable loans. It was expected to make further decisions by September.

Other measures aimed at addressing poverty include $100 million for insulating homes of those on low incomes, and a whiteware programme under which beneficiaries could buy new whiteware from approved providers with Social Development repayable grants, rather than buying second-hand.

There will also be a trial of a 'Warrant of Fitness' programme to assess the health and warmth of rental housing, which will initially be run on state houses. The assessment standards would be developed by a forum of those in the sector, including councils, private rental groups, and tenant advocates.

Housing Minister Nick Smith said it would initially apply to the 69,000 state houses, but it was intended to extend it to all social housing providers, in particular homes where the Government was paying rent subsidies. He said it complemented the insulation scheme: all Housing NZ properties were expected to be insulated by the end of this year.

A Warrant of Fitness for rental properties was picked up as Labour Party policy after it was recommended by the Advisory Group on Child Poverty.

The Maori Party had listed the initiatives in its support agreement with National and formed a Ministerial Committee on poverty which was headed by Deputy Prime Minister Bill English.

Mr English said although spending increases had been 'modest,' it was also targeted, and poverty reduction and vulnerable children were one of the Government's priorities.

While there was no Budget announcement on funding for food in schools, Mr English said the Government was looking at the issue and was expected to make an announcement in a few weeks.

The Government has also allocated $35m for extended family members, such as grandparents, who are caring for children.

NZ First MP Tracey Martin has a members' bill to extend allowances which foster parents qualify for, such as a clothing allowance, and for those who care for extended family members. The Government is expected to support that bill when it comes before Parliament.

Ms Bennett said more than 12,000 children were being cared for by family other than their parents, often because of the death of a parent or a family breakdown. She acknowledged that if not for those carers, the children would be in state care. She had also set up a ministerial reference group to advise on how such carers could be better supported.

Poverty:

Investigate and pilot partnerships with community groups and banks for low or no interest loans for low-income borrowers.

Trial of a 'Warrant of Fitness' for rental properties, initially on state houses.

$100m over three years to insulate homes of those on low incomes

$21m more for rheumatic fever

Announcement about food in schools expected in a few weeks' time.

$1.5m more for Budgeting Services

Whiteware programme: repayable grants for beneficiaries to buy whiteware at low cost.

$35m for extended family (eg grandparents) who raise children.

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